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DIRECTIVE No. 12/1999/CT-TTg OF MAY 10, 1999 ON REVIEWING THE IMPLEMENTATION OF THE LAW ON STATE ENTERPRISES

The Law on State Enterprises adopted by the National Assembly on April 20, 1995, is the legal basis for the organization, operations and renovation of the of State enterprises. It has created conditions to increase the autonomy, the self-assumption of responsibility of the enterprises and the efficiency of the State management over State enterprises. However, in recent years, in view of many changes in the business environment and the conditions for the operations of State enterprises, a number of regulations of the Law on State Enterprises no longer conform with realities of life. Moreover, a number of questions newly arising in practice have not been regulated by the Law on State Enterprises thus creating hindrances to the operations of the enterprises and to renewal in the State enterprises sector.

In order to supply more information in service of the study to draft the Law on State Enterprises (amended) in the direction of renewing the management of State Enterprises as set out in the Resolution of the 4th Plenum of the Central Committee of the Party (VIIIth Congress); to meet the needs of socio-economic development of the country; to overcome the limitations and shortcomings of the existing Law; at the same time, to further strengthen the autonomy and self assumption of responsibility of the enterprises and the efficiency of the State management over State enterprises, the Prime Minister requests the ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and centrally-run cities and the Managerial Board of Corporations 91 to conduct reviews in order to evaluate what has been achieved and what is not yet achieved, to determine clearly the causes, and to suggest the contents that need to be amended or supplemented or to propose new regulations in the Law on State Enterprises. These suggestions should be concentrated on the following main contents:

1. To determine the method of differentiation and the norms to determine what is a State enterprise engaged in business activities and what is a State enterprise engaged in public utility activities; and the rights and obligations of these types of State enterprises.

2. The powers and responsibilities of the State owners over State enterprises; the allocation of powers in the realization of the ownership right of the State among the agencies representing the ownership, agencies empowered to represent ownership of the State agencies; the coordination among the agencies entrusted with the right to represent the State ownership; the powers and responsibilities of the ministries, the ministerial-level agencies, the agencies attached to the Government managing branches and domains, the People�s Committees of provincial level and the Ministry of Finance, the coordination between these agencies in the management of State enterprises.

3. The models of Corporations.

The models of Corporations 91 and Corporations 90; the cohesion of the member units; the relations between the Corporation and the member enterprises; the allocation of managerial responsibilities within the Corporation; the relations between the Corporation and the State managerial agencies.

4. The model of Managerial Board.

Functions, tasks, powers and responsibilities of the Managing Board, the Chairman of the Managing Board, the General Director, the enterprise Director, the relations between the Managing Board and the General Director.

The number of State enterprises where the Managing Boards have been set up, the number of members of the Managing Board (average, highest and lowest), structure of composition, criteria and working regime of the Managing Board.

5. The mechanism of financial management in a State enterprise.

Regulations on the management and use of capital and properties assigned by the State to the enterprises; the management of turnover, expenditures and results of the business activities; distribution of profits; the regime of accountancy and statistics; the regime of publicity of the annual financial reports for each type of State enterprises (enterprises engaged in business operations, enterprises operating in public utility, Corporations 91, Corporations 90 and member enterprises).

6. Management of the State capital at other enterprises.

The situation concerning the mobilization, management and use of capital contributed by outside to the State enterprises and management of the capital contributed by the State enterprises to other enterprises (number of State enterprises drawing capital from outside, number of State enterprises having capital contributed to other enterprises, number of enterprises with 100% State capital set up by State enterprises pooling capital and registering according to the Corporate Law, number of State enterprises entering into joint ventures with foreign parties, the rate of capital contribution, form of capital contribution and mechanism of management of this part of capital).

The situation of drawing capital contributed by officials and public employees (number of State enterprises with capital contributed by officials and public employees but not yet transformed into stock companies, the mechanism and organization of management).

Evaluation of the regulations and the realization of the transformation of ownership at the State enterprises; functions, rights and obligations of the Managing Board, the General Director or Director, the person directly managing the capital contributed by the State at other enterprises, and the unsettled questions and sticking points that need settlement (especially the question of repurchase, assignment of the contributed capital, management of the State capital at the equitized State enterprises).

7. Evaluation and suggestion for amendments and supplements to other mechanisms and policies of the State toward State enterprises.

In the process of reviewing the implementation of the Law on State Enterprises, the ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the Presidents of the People�s Committees at provincial level, and the Managing Board of Corporations 91 should evaluate the characteristics in the organization and management of the State enterprises under the jurisdiction of the ministries, branches, localities and Corporations; the need to specify these characteristics in the Law on State Enterprises.

The Prime Minister requests the ministers, the heads of ministerial-level agencies, the heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and centrally-run cities, the Managing Board of Corporations 91 to organize and direct the good implementation of this Directive, and ensure the objective and requirements and send the reviewing report to the Ministry of Planning and Investment and the Office of the Government at the latest on June 15, 1999.

For the Prime Minister

Deputy Prime Minister

NGO XUAN LOC